Perfect World, the Chinese gaming giant behind popular titles like Persona 5: The Phantom X and One Punch Man: World, is undergoing a major leadership change. Following significant layoffs affecting over a thousand employees and underwhelming financial results, CEO Xiao Hong and co-CEO Lu Xiaoyin have resigned, according to a Game Gyroscope report on the Chinese WeChat platform. However, reports suggest they will remain on the board of directors.

Gu Liming, a long-serving Perfect World executive and former Senior Vice President, has been appointed as the new CEO. This transition signals a potential strategic shift for the company as it aims to overcome recent challenges.

Perfect World's Recent Difficulties

The company's substantial layoffs represent a significant setback. Revenue from existing games has declined, and even the highly anticipated One Punch Man: World underperformed in international beta testing. The game has remained strangely inactive, with no updates on the App Store or Google Play since April.

Perfect World anticipates substantial financial losses in the first half of 2024, projecting a net loss of 160-200 million yuan compared to a profit of 379 million yuan the previous year. The gaming division is expected to bear the brunt of this loss, with a projected net loss of 140-180 million yuan.

Further compounding the situation, the middle office team has been drastically reduced, shrinking from 150 employees to a mere dozen. Despite these difficulties, the upcoming update for Tower of Fantasy offers a glimmer of hope. Version 4.2, launching August 6, 2024, aims to revitalize the game and potentially improve its financial performance.

The newly announced title, Neverness to Everness, has generated considerable pre-registration interest, with nearly three million pre-registrations worldwide within a week. While this urban-themed open-world RPG won't launch until at least 2025, the early enthusiasm suggests strong potential.

The success of Perfect World's turnaround hinges on the new management team's ability to navigate these challenges. The coming months will be crucial as they focus on key initiatives, streamline operations, and strive to restore financial stability.

For more gaming news, see our other article on Wang Yue, the open-world ARPG nearing its testing phase.